Last updated: 26/06/2014
CENTRAL AUTHORITY FOR REPORTING
Financial Intelligence Unit (FIU) of the Principality of Liechtenstein.
The FIU has been a member of the Egmont Group since 2001.
OTHER ANTI-MONEY LAUNDERING REGULATOR(S)
HAS THE LIECHTENSTEIN AML LEGISLATION BEEN HARMONISED WITH THOSE OF THE THIRD EU MONEY LAUNDERING DIRECTIVE? IF NOT, IS THE LIECHTENSTEIN LEGISLATION EXPECTED TO BE HARMONISED?
Legislation to implement the 3rd Anti-Money Laundering Directive and the PEP Directive have been approved by the Liechtenstein Parliament in 2008 and the respective laws entered into force on March 1, 2009.
LIST THE LAWS REGARDING ANTI-MONEY LAUNDERING, INDICATING WHICH LAWS ARE APPLICABLE TO LAWYERS.
Section 165 of the Liechtenstein Penal Code regarding money-laundering.
Due Diligence Act (DDA) as amended by implementing the 3rd Anti-Money Laundering Directive, which amendment entered into force on March 1, 2009 and which replaced the former DDA. The DDA has again substantially been amended in 2013.
Due Diligence Ordinance (DDO) of February 17, 2009 which replaced the former DDO and entered into force on March 1, 2009. Also the DDO has again substantially been amended in 2013.
ARE VISITING LAWYERS SUBJECT TO LOCAL LAWS REGARDING ANTI-MONEY LAUNDERING, AND, IF SO, TO WHAT EXTENT?
Any lawyer practicing in Liechtenstein, therefore also any lawyer providing cross-border services, is subject to the respective national anti-money laundering legislation.
LIST ANY MONEY LAUNDERING GUIDANCE FOR LAWYERS (FOR EXAMPLE, LAW SOCIETY OR BAR ASSOCIATION GUIDELINES) CURRENTLY IN PLACE.
IS THE LAW SOCIETY/ BAR ASSOCIATION INVOLVED IN SUPERVISING OR ENFORCING COMPLIANCE WITH ANTI-MONEY LAUNDERING REGULATIONS?
The Bar Association is not directly involved in supervising or enforcing compliance with anti-money laundering regulations. Supervision and enforcement is centralised within the national Financial Market Authority (FMA). The prosecution is centralised within the National Police, the Attorney General’s office and the Courts.
The Bar Association can however sanction any misconduct or violations of AML regulations based on the Bar Association’s Code of Ethics.
DESCRIBE CLIENT DUE DILIGENCE REQUIREMENTS, INCLUDING WHEN IT MUST BE UNDERTAKEN BY LAWYERS.
Before entering into a contractual client relationship involving financial transactions, lawyers are required to identify any individuals involved who are subject to due diligence legislation. Such persons must be identified using an official document of identification and a written confirmation with respect to the ultimate beneficial owner must also be obtained.
The individual subject to due diligence legislation has to verify the identification of the beneficial owner on a risk-based basis. He also has to create a comprehensive written profile of the client relationship, detailing all the individuals and parties involved and the origin and the intended use of the assets involved. The profile of the client relationship has to be continuously monitored and must be amended or updated if necessary.
DOES YOUR COUNTRY FOLLOW A RISK-BASED APPROACH TO CLIENT DUE DILIGENCE BY LAWYERS?
The system of anti-money laundering regulation in the Principality of Liechtenstein generally follows risk-based approach. This means that, amongst other requirements, client information has to be kept up-to-date and transaction monitoring needs to be conducted on an on-going basis.
ARE THERE ENHANCED DUE DILIGENCE MEASURES FOR CERTAIN TYPES OF CLIENTS, FOR EXAMPLE, POLITICALLY EXPOSED PERSONS?
Yes, for PEP’s and other specific circumstances, enhanced customer due diligence must be undertaken according to sec. 11 DDA.
ARE THERE SIMPLIFIED DUE DILIGENCE MEASURES FOR CERTAIN TYPES OF CLIENTS, FOR EXAMPLE, LISTED COMPANIES?
Yes, simplified due diligence measures are allowed for specific circumstances according to sec. 10 DDA. For example, if a listed company is the contracting partner, simplified due diligence measures may be applied.
ARE LAWYERS PERMITTED TO RELY ON THIRD PARTY DUE DILIGENCE? IF YES, PLEASE DESCRIBE.
Lawyers may rely on third party due diligence if the third party is duly regulated in its own jurisdiction. The liability of fulfilling all the due diligence requirements remains with the Liechtenstein lawyer required to conduct the due diligence and he is therefore liable for any mistake or omission in the third party’s due diligence that he relied on.
WHEN IS A LAWYER UNDER AN OBLIGATION TO REPORT SUSPICIOUS TRANSACTIONS?
Lawyers are required by law to submit a written STR to the FIU as soon as circumstances in the context of a business relationship give rise to a suspicion of money laundering, a predicate offence of money laundering, organized crime or terrorist financing and the individual or lawyer conducting due diligence is unable to eliminate that suspicion.
DOES ATTORNEY/ CLIENT PRIVILEGE AND/ OR DUTIES OF CONFIDENTIALITY PROVIDE A DEFENCE OR PARTIAL/ TOTAL EXCEPTION TO THE REQUIREMENT TO REPORT SUSPICIOUS TRANSACTIONS?
According to sec. 14 of the Due Diligence Ordinance (DDO) there are specific exceptions with respect to due diligence obligations of lawyers e.g. if they act as pure defense attorneys.
DOES LOCAL LAW PROVIDE ANY CRIMINAL AND/ OR CIVIL INDEMNITY TO A LAWYER WHO HAS REPORTED A SUSPICIOUS TRANSACTION?
Section 19 of the Due Diligence Act (DDA) offers full criminal and civil indemnity for any individual subject to due diligence requirements who has reported a suspicions transaction, provided the STR has not been filed maliciously and without any suspicion of illegal activities.
ONCE A SUSPICIOUS TRANSACTION REPORT HAS BEEN FILED, IS A LAWYER ALLOWED TO PROCEED WITH THE LEGAL ADVICE/TRANSACTION, AND, IF SO, MUST CONSENT FROM AUTHORITIES BE OBTAINED FIRST?
A lawyer may proceed with the planed transaction only with the express consent of the regulating authority. In general, any assets related to a STR are frozen for a certain period of time following the filing of the STR.
IS THERE A TIPPING-OFF PROHIBITION? IF YES, PLEASE DESCRIBE.
Yes, under sec. 18 of the new DDA, it is generally prohibited to tip-off any client or third party.
DESCRIBE ANY RESTRICTIONS ON ACCEPTING A NEW CLIENT.
There are no express restrictions on accepting new clients, except sanction lists which of course have to be followed. However, the general obligations to report any suspicious transaction remains. According to the DDA, this STR obligation applies even before a contractual relationship is entered into.
ARE THERE ONGOING MONITORING REQUIREMENTS FOR EXISTING CLIENTS? IF YES, PLEASE DESCRIBE.
Any individuals subject to due diligence legislation, including lawyers, are obliged to monitor all client relationships on an ongoing basis (sec. 5 para 1 DDA) . This is an important aspect of the legislation’s risk-based approach.
DESCRIBE ANY OTHER WAYS IN WHICH LAWYERS ARE AFFECTED BY ANTI-MONEY LAUNDERING LEGISLATION.
No information available.
HAVE LAWYERS IN YOUR JURISDICTION BEEN IMPLICATED IN MONEY LAUNDERING, INCLUDING ANY TYPE OF COMPLAINT, ARREST OR PROSECUTION?
There have been several cases where lawyers who have been implicated in money laundering, have subsequently been arrested and/or prosecuted.
HAS THE FINANCIAL ACTION TASK FORCE (FATF) CONDUCTED A MUTUAL EVALUATION OF THIS COUNTRY, AND, IF SO, WHAT WERE THE FINDINGS CONCERNING LAWYERS’ COMPLIANCE WITH THE FATF 40+9 RECOMMENDATIONS?
No. Liechtenstein is not member of FATF, but it is a member of the Moneyval Committee within the Council of Europe, which is a FSRB (FATF Regional Style Body).
Liechtenstein has been evaluated by the IMF and Moneyval several times. The Moneyval 3rd round assessment report was adopted at the Moneyval Plenary in Strasbourg in September 2007. The report is available here. Moneyval also released a Progress Report in December 2008, which is available here. A new evaluation (as part of the 4th Moneyval evaluation round) has been conducted by the IMF in 2013 and the respective report, showing again further substantial improvements of Liechtenstein’s AML system, is now published in 2014.
Liechtenstein was removed from the FATF blacklist in 2001 and the Moneyval Progress report confirmed a high standard of compliance with the FATF 40+9 recommendations.
Information supplied by:
Lampert & Schächle Attorneys at Law Ltd.
Landstrasse 104, POB 1257, 9490 Vaduz
Phone: +423 233 45 40
Fax: +423 233 45 41
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